Corporation Tax Act 2009 section 67

Restrictions on section 63 expenses: lease of part of premises

Section 67 adapts the tenant's deemed expense deduction rules where a sublease has been granted over only part of the premises held under the original taxed lease, requiring the calculations to be split between the sub-let portion and the remainder.

• Where a sublease covers only part of the premises under the taxed lease, the expense deduction and restriction rules must be applied separately to the sub-let part and to the remainder of the premises.
• If multiple subleases of different parts of the premises are in force on the same qualifying day, each part and the remainder are treated independently for calculation purposes.
• The amount of the taxed receipt used in the formula (referred to as "A") is reduced by multiplying it by the fraction of the total premises that the relevant sub-let part represents.
• The fraction used to apportion the taxed receipt between the sub-let part and the remainder must be calculated on a just and reasonable basis.